Relief as judge slams the brakes on 50 percent increase in insurance premiums

The High Court has frozen a plan by insurance companies in Kenya to increase premiums by 50 percent starting this January.

While issuing the interim orders, Mr Justice Makau also put on the hold a plan by insurers to stop offering comprehensive cover for motor vehicles that are older than 12 years or with a value of less than Kes600,000.

Last week, the Kenya Human Rights Commission (KHRC) filed a case in court accusing the Insurance Regulatory Authority (IRA) of discrimination and failure to protect the public and policyholders from an arbitrary rise in premiums.

“I have considered the petitioners’ grounds in support of the application and oral submissions by both parties upon careful evaluation of the same, I find that the petitioner has demonstrated a prima facie case with a likelihood of success,” said Judge Makau.

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In notifications to motor vehicle owners in late December, insurers sought to revise upwards the premiums they charge for comprehensive cover, saying this would help them stem losses.

According to one customer who has a policy with Sanlam insurance, their comprehensive motor vehicle cover will go up to Kes72,324 from Kes47,714 paid last year.

Similarly, ICEA Lion notified a customer of the revised rates with their policy for private motor vehicles showing one will be expected to pay Kes74,374 from Kes51,018 starting January 1.

“The said actions also amount to a violation of consumer rights and are punitive, insensitive and oppressive,” said lawyer Kelly Malenya for KHRC told the court.

The case will be mentioned on February 14.

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